Archives: Quiz

The amount of interest accrued is added to the note payable account and reported in the liabilities section of the balance sheet. a. True b. False A note discounted with recourse means that if the original customer fails to pay […]

Bing’s Export Co. Bing’s Export Co. purchased a new delivery truck at the beginning of 2015. The truck has a cost of $37,000, an estimated life of 5 years, and an estimated residual value of $7,000. A full year’s depreciation […]

A list of all asset, liability, stockholders’ equity, revenue, and expense accounts, along with their assigned account numbers, which are used by a company is a(an) a. Account b. General Journal c. General Ledger d. Chart of Accounts Lenders are […]

Which of the following is not an objective of financial reporting? a. To reflect prospective cash receipts to investors and creditors. b. To reflect prospective cash flows to an enterprise. c. To reflect resources and claim to resources. d. To […]

Select the ratio that each statement below most properly satisfies. a. Dividend yield ratio b. Cash flow from operations to capital expenditures ratio c. Debt service coverage ratio d. Return on common stockholders’ equity ratio e. Times interest earned ratio […]

Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. a. Debit b. Credit Dividends Assets may be used to satisfy business obligations and to […]

The alternate term for a credit card draft is an invoice. a. True b. False In a vertical analysis of the balance sheet, the 100% amount is a. Current assets b. Working capital c. Total assets d. Total stockholders’ equity […]

The Stockholders’ Equity section of the balance sheet for Grant Corp. at the end of 2016 appears as follows: Net income for the year was $1,250,000. Dividends were declared and paid on the preferred shares during the year, and a […]

Davis Corp. has three employees. Each earns $600 per week for a five day work week ending on Friday. This month the last day of the month falls on a Wednesday. The company should make which of the following adjusting […]

Washington Corp. reported the following information for 2015 and 2016. If Washington uses the indirect method to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash inflow from operating activities […]

A company has $200 in cash, $500 in accounts receivable, and $700 in inventory. If current liabilities are $400, then the current ratio would be a. 1.75 to 1 b. 2.25 to 1 c. 3.00 to 1 d. 3.50 to […]

Parks Company reported an increase of $370,000 in its accounts receivable during the year 2015. The company’s statement of cash flows for 2015 reported $1 million of cash received from customers. What amount of net sales must Parks have recorded […]

The Financial Accounting Standards Board created the objectives of financial reporting. a. True b. False Identify where each of the following accounts would be reported on CocaÂCola’s financial statements. a. Balance Sheet-Property, Plant, and Equipment b. Balance Sheet-Intangible Assets c. […]

When plant assets are reported, the current period’s depreciation expense is subtracted from the original cost on the balance sheet. a. True b. False United Airlines is an example of a a. producer b. supplier c. retailer d. service provider […]

Stockholders prefer to invest in preferred stock because a. preferred stock confers preferred voting rights. b. preferred stock can always be converted to common stock if they desire. c. the dividends are generally increased each year. d. the dividends are […]

Earnings per share is an indication of how much a. the company paid as dividends for each share of stock held by stockholders. b. the company earned for each share of outstanding common and preferred stock. c. the company earned […]

The solution to this problem requires time value of money calculations. Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. If interest is compounded annually, the total amount of interest on an $18,000 note […]

Blanton Company bought equipment on January 1, 2010 with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years. Due to obsolescence, it was […]

Arco Corporation declared a cash dividend on June 2 of $6 per common share. The company has 2,000 shares of common stock authorized, 1,000 shares issued, and 200 in the treasury. The entry to record the declaration of the cash […]

Manson World reported the following: Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the […]

Three organizations important to accounting are listed below. Select the organization th at most closely achieves the role described. a. American Institute of Certified Public Accountants (AICPA) b. Financial Accounting Standards Board (FASB) c. Securities and Exchange Commission (SEC) Issues […]

Which of the following statements is true concerning intangible assets? a. Intangible assets have no economic substance. b. Intangible assets lack physical existence. c. Intangible assets are listed in the stockholders’ equity section of the balance sheet. d. Intangible assets […]

The income statement tells the reader about the actual cash inflows during a period of time. a. True b. False Harvest Catering is a local catering service. Conceptually, when should Harvest recognize revenue from its catering service? a. At the […]

If a company purchases $3,200 worth of inventory with terms of 2/10, n/30 on March 3 and pays March 12, then the amount paid to the seller would be a. $3,136 b. $3,150 c. $3,168 d. $3,200 Which one of […]

Which of the following will not cause a trial balance to be out of balance? a. The balance for an account is incorrectly computed. b. A debit entry is posted as a credit. c. A credit entry is posted to […]

On January 2, 2015, Hi-Tech Master Construction, Inc. issued $500,000, 10-year bonds for $574,540. The bonds pay interest on June 30 and December 31. The face rate is 8% and the market rate is 6%. The annual cash payment (paid […]

Match the selected items from a classified balance sheet and multiple-step income state ment to the section in which they would appear on the classified balance sheetor the inc ome statement. a. Current Assets (balance sheet) b. Property, Plant, & […]

The justification for the accrual basis of accounting lies in the needs of financial statement users for periodic information on the financial position and the profitability of the entity. a. True b. False The solution to this problem requires time […]

Operating activities involve the acquiring and selling of goods and services for cash or on account. a. True b. False Promissory notes are non-negotiable. a. True b. False Answer: False Martinez Produce sells fresh vegetables and fruits in Sutton County. […]

Choose from the following list of account titles the one that most accurately fits the des cription of that account or is an example of that account.An account title may be used m ore than once or not at all. […]

The selection of historical cost over current value as the attribute to be measured for assets is an example of the trade-off of a. Reliability over relevance b. Costs over benefit c. Comparability over consistency d. Understandability over verifiability All […]

If your bank gives you a $2,000 loan at 8% per year, but deducts the interest in advance, is 8% the “real” rate of interest that you will pay? a. Yes. b. No. The interest rate is actually lower than […]

Genuine Parts received a promissory note from a customer on March 1, 2015. The face amount of the note is $8,000; the terms are 90 days and 9% interest. What is the total amount of interest that Genuine Parts will […]

Beatrice Equipment Beatrice Equipment sells merchandise only on credit. For the year ended December 31, 2014, the following data is available: Refer to Beatrice Equipment. Assume that Beatrice Equipment estimates bad debts on an aging analysis, and the aging schedule […]

Paulson Transport Company On January 1, 2015, Paulson Transport Company purchased a ship for $2,000,000. It has a ten-year useful life and a residual value of $50,000. The company uses the double-declining-balance method. What was the book value of the […]

Ratios that focus on cash are more useful than those that focus on income in the evaluation of the liquidity of a company. a. True b. False From the following list, select the proper section from the statement of cashflows […]

The accounts receivable turnover ratio is a measure of how well a company manages its receivables. a. True b. False On January 2, 2015, Lawn Master Construction, Inc. issued $500,000, 10-year bonds for $574,540. The bonds pay interest on June […]

Which one of the following statements regarding changing inventory methods is true? a. A change in inventory methods can be justified if the change is made to better match profits with revenue. b. Changing inventory methods affects consistency. c. One […]

A question asked by stockholders is, “How much profit did the company make?” What should the stockholder examine to get the most information that will help evaluate the answer to this question? a. The balance sheet, because retained earnings represents […]

Dino’s Pizza employs 10 workers in its plant. Each employee is paid $8 per hour and works 8 hours per day, Monday through Friday. Employees are paid every Wednesday for the previous Monday through Friday workweek. The last payday was […]

Which of the following statements regarding the activities of Forman Corp. is true? a. Revenues decrease Forman’s stockholders’ equity. b. Expenses increase Forman’s stockholders’ equity. c. Expenses decrease Forman’s stockholders’ equity. d. None of these answer choices is correct. Vegas […]

Mellon Corporation The data presented below is for Mellon Corporation for the year ended December 31, 2015: Refer to information for Mellon Corporation. If Mellon uses 2% of net credit sales to estimate its bad debts, what will be the […]

Match the following terms to the appropriate statement by placing the letter to the left of each statement. a. Centralization f. Net operating profit b. Decentralization g. Profit center c. DuPont Model h. Residual income (ROI) d. Economic value added […]

Which of the following does benchmarking not focus on? a. Identifying best practices b. Studying best practices c. Analyzing best practices d. Eliminating non-value-added processes Benny Books sells first edition books. Benny purchases the books from his supplier for $100 […]

Indicate which of the following costs are classified as mixed or step costs. Answer: Which of the following might be measures of performance for a balanced scorecard? a.Stock price b.Sales revenue c.Customer satisfaction d.All of these answer choices are correct […]

Identifying activities performed in the organization is the first step in developing activity-based product costs. Which of the following is a way to identify these activities? a. Asking employees what they do b. Analyzing industry averages c. Both asking employees […]

Ron White Inc. plans to introduce a new product and is using the target cost approach. Projected sales revenue is $810,000 ($4.05 per unit) and target costs are $730,000. What is the desired profit per unit? a. $0.40 b. $2.03 […]

Murphy Company produces two products: Standard and Deluxe. The company uses an activity-based costing system. Murphy produces 8,000 units of Standard and 2,000 units of Deluxe. The company uses two activity cost pools, with estimated total cost and activity as […]

Which of the following is not a duty of a management accountant under the IMA Statement of Ethical Professional Practice ‘s confidentiality standard? a.Refrain from engaging in any conduct that would prejudice carrying out duties ethically. b.Keep information confidential except […]

With activity-based costing, the goal is to a. Develop a product cost that captures the amount of each resource consumed by the activities performed to produce a specific product. b. Develop a product cost that allocates manufacturing overhead to each […]